Cardano Explodes To Record Highs. Will It Leave Bitcoin, Ethereum In the Dust?
Andy Hecht | Sep 02, 2021 20:06
This article was written exclusively for Investing.com
- Cardano (ADA) is the third leading cryptocurrency
- Bitcoin and Ethereum remain below all-time highs from April and May
- ADA rising to a new record peak
- ADA’s rise could be a sign for the rest of the asset class
- Alonzo upgrade pushed ADA to the new high
Cryptocurrencies have been rallying since reaching lows in late June. Bitcoin and Ethereum have made a series of higher highs over the past six weeks. Each is now back at levels seen in May.
The asset class’s market cap dropped from over $2.4 trillion to below the $1.4 trillion level as Bitcoin and Ethereum more than halved in value from the 2021 high. But, as of Aug. 24, the value of all 11,382 cryptocurrencies was back at the $2.077 trillion level.
Cardano, the crypto in the top three hierarchy, hit the $2.40 level in mid-May. After falling to a low of around $1.12 in July, the price exploded higher, eclipsing the mid-May record high over the past week.
Cardano’s ascent could be a sign of things to come for the cryptocurrency asset class.
h2 Cardano: third leading cryptocurrency/h2Cardano is a public blockchain platform. It's open-source and decentralized, with consensus achieved using proof of stake. Cardano facilitates peer-to-peer transactions with its internal cryptocurrency, ADA. In 2015, Ethereum co-founder Charles Hoskinson founded Cardano.
Cardano’s website states it is:
“A blockchain platform for changemakers, innovators, and visionaries, with the tools and technologies required to create possibility for the many, as well as the few, and bring about positive global change.”
As of early September 2021, Cardano was the third-leading cryptocurrency.
Chart: Investing.com
As the chart shows, at the $3.0451 per token level, ADA has a market cap of over $98.90 billion, third behind Bitcoin (BTC) and Ethereum (ETH), but ahead of the fourth and fifth cryptocurrencies, Binance Coin (BNB) and Tether (USDT), the stablecoin.
h2 Bitcoin and Ethereum remain below all-time highs from April and May/h2At the end of August, Bitcoin futures were trading at the $47,210 level.
Get The App
Source: CQG
As the chart highlights, Bitcoin was approximately 27.9% below its all-time high from mid-April 2021 on Aug. 31.
Source: CQG
At the $3415 level on Aug. 31, Ethereum was sitting at around 22.5% under its record peak from May 2021.
Meanwhile, Cardano’s crypto has been rallying as Bitcoin and Ethereum recovered from the late June lows, reaching new heights.
h2 ADA rising to a new record peak/h2On Thursday, Aug. 26, ADA rose to a new record peak at $2.9442 per token. As of Thursday, Sept. 2 it's gone even higher—to $3.0123 at time of publication.
The chart shows ADA’s recent ascent. In May, when Ethereum rose to over the $4400 level, ADA reached $2.3091. The price moved above that level on Aug. 18 and reached a new high at the start of September.
ADA tokens were named after Augusta “Ada” King , or Ada Lovelace, a 19th-century British countess known for her work on a theoretical computation engine. She was the daughter of the poet Lord Byron and was likely the first computer programmer.
ADA’s proof of stake randomly allocates coins to users, who put up coins for collateral. While Cardano uses proof of stake, Bitcoin and Ethereum use proof of work, requiring a global computer network working at the same time when a transaction occurs. Meanwhile, proof of stake is a greener alternative to proof of work as it requires far less computing power. Cardano has a distinct advantage over Bitcoin and Ethereum with environmentalists.
h2 ADA’s rise could be a sign for the rest of the asset class/h2As of the end of August, 11,521 cryptocurrency tokens were trading in the asset class, with a total market cap of $2.100 trillion. The top three, Bitcoin, Ethereum, and Cardano had a combined value of $1.381 trillion or over 65.7% of the entire asset class. Ethereum is over four times more valuable than ADA, and Bitcoin’s value is around ten times higher.
Meanwhile, the rise of ADA to the third position is a sign that altcoins are making a move within the cryptocurrency landscape.
Signaling that strength, and perhaps bolstering Cardano’s rise, Coti (COTI), an altcoin centered on payments and supported by Cardano, went live on Coinbase (NASDAQ:COIN) for trading in late August. COTI rose from 29 cents to 45 cents, a 55% increase, though it's fallen a bit lower since. COTI was the 161st cryptocurrency in late August, though as of publication it's slipped to 190. At 34.2 cents, the crypto has an almost $300.88 million market cap.
h2 Alonzo upgrade pushed ADA to the new high/h2Cardano’s current price appreciation came after it announced a major upgrade—referred to as a hard fork—called Alonzo, scheduled to launch on Sept. 12. Alonzo will introduce smart contracts to the blockchain.
ADA also surged as Japan’s exchange will list ADA. Japan’s regulatory environment is one of the strictest in the world for entering the market. The Japanese exchange allows trading in Bitcoin, Ethereum, and Litecoin. ADA joined this elite class of cryptocurrencies, pushing the market cap into third place in August 2021.
Some crypto analysts believe that Cardano has the potential to leave Bitcoin and Ethereum in the dust over the coming years. The possibility for Bitcoin and Ethereum-type returns from a token trading at below the $3 level could attract lots of speculative interest.
As with all of the members of this asset class, only invest what you are willing to lose since the high level of volatility could cause violent price swings. ADA tokens have the critical mass and liquidity for traders. However, the potential for wide price variance means that risks are always a function of the potential for rewards.
Keep an eye on ADA as the Cardano protocol is attracting lots of attention.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.